You may think that when it comes to taking credit card payments from your clients, that all you need is the right hardware. However, this isn’t the case. Indeed, in most situations, you will also need to go through an ISO or Independent Sales Organization, which are third-party companies that mediate between you and the bank.
Why are ISOs so important?
ISOs are important because it is no longer the credit card companies or the banks behind them that deal directly with new merchant clients. The reason for this is that because card payment tech is so popular, the original companies don’t have the facilities to deal with demand. Additionally, credit card payments continue to be regarded as high risk, and by getting a third part ISO involved banks can separate themselves from this risk to a greater degree.
To that end, the task of going through the transaction rates and terms with the merchant is left to the ISO providers. If the merchant agrees with the terms the account can be opened and will then be unwritten by the bank. However, it is strongly recommended that you don’t take the first offer your business is presented with.
Instead, remember that, unlike other third-party payment providers, it is possible to negotiate the rate that you pay with ISOs. With that in mind get any iso payment agreement looked at by a qualified and experienced legal team before signing. After all, the consequences of that agreement will be enacted multiple times a day, and that can add up over time.
The benefits of an ISO
ISO indeed requires a small percentage cut from every transaction put through them, which will add to your business’s costs. However, these are not only smaller than other third-party payment providers like Paypal but include the opportunity for the merchant to negotiate a better deal as well.
Indeed, the better reputation you have as a business, and the more stable your income, the more bargaining power you will have to get this fee percentage reduced. Although using a qualified legal team to help you, won’t hurt either!
More Flexibility, Same Security
ISOs also tend to be a lot smaller than the other third-party payment services that are on offer, and this can be great for your business. The reason for this is that they are much more willing and able to provide responsive and personalized service matched to the specific needs of your business.
Indeed, instead of being lumped in with all the other customers, and expected to wait in line for customer service and payments to hit your account, ISOs must do all they can to retain your business for their success. This means you can expect a much better level of customer service.
Another reason that using an ISO for your company’s credit card payments can be beneficial is that it helps reduce risk. This is because ISO has to work with larger financial institutions like banks to underweight the credit agreements they provide. Of course, banks aren’t going to be happy working with any-old provider, and so will insist on the relevant experience and checks before agreeing to work with them.